Arbitration agreement-

Drafting
Jurisdiction of the arbitral tribunal

Unlike the courts, arbitral tribunals derive their jurisdiction from the arbitration
clause and cannot travel beyond the four corners of the clause. Therefore, the parties
must decide, in the most unequivocal terms, the jurisdiction of the arbitral tribunal.
The parties could have an all encompassing clause by virtue of which all disputes and
issues arising out of or in connection with the contract would be able to be referred to
arbitration or they could also seek to limit the scope of reference to arbitration to
limited or specific issues or categories of dispute.
A multi-step resolution clause?

The next element for consideration should be whether the dispute resolution clause is
a multi-step resolution clause. The parties may determine preliminary steps which are
required before entering into the process of arbitration. The parties may provide for
negotiation or mandatory period of settlement talks or conciliation proceedings prior
to reference of dispute to arbitration.
Composition of the arbitral tribunal
In deciding this question, issues such as the quantum of possible disputes, costs involved in
terms of arbitration fees etc. are relevant. It may be borne in mind that if the arbitration is
subject to Part I of the 1996 Act, in the event the arbitration clause does not set out the number
of arbitrators, by default, the arbitral tribunal would consist of a sole arbitrator.
Appointment of arbitrators
The parties are usually free to decide the procedure and mode of selection for appointment of
the arbitrator/arbitral tribunal. This is true for arbitrations subject to the 1996 Act as well. In
international commercial arbitrations, the nationality of the arbitrators at times is a factor for
consideration between parties, and parties can provide for neutral nationality of the sole
arbitrator or presiding arbitrator in case of a tribunal consisting of three members. As per the
1996 Act, a person of any nationality may be an arbitrator, unless otherwise agreed by the
parties.
Rules of Procedure for conduct of arbitral
proceedings
In drafting of an arbitration clause, the next relevant factor for consideration is what would be
the rules of procedure for conduct of the arbitration proceedings i.e. the curial law governing
the arbitration proceedings and whether the same should be via selection of institution or
crafting personalized rules. In international commercial arbitrations, parties can resort to
institutional arbitrations governed by institutional rules such as ICC rules; Rules of Arbitration
of the Singapore International Arbitration Centre (SIAC Rules) or resort to ad-hoc arbitration.

Arbitration proceedings governed by the 1996 Act are essentially in the nature of ad-hoc
proceedings and parties are free to agree on the procedure to be followed by the arbitral tribunal
in conducting its proceedings.
 Substantive law of contract, of the
arbitration agreement, and the seat

While drafting an arbitration clause, the parties should also specifically define substantive law of the

Contract and the law of the Arbitration Agreement

Substantive law is the law that governs the merits of a dispute, that is, in the case of the contract, the party's

substantive rights and obligations, as opposed to the law governing procedure of arbitration. Since the

substantive law is the governing law under which the contract is to be interpreted, it is at times set out as a

separate "governing law clause" independent of the arbitration clause.

The law applicable to the arbitration agreement governs the formation, validity,

enforcement and termination of the arbitration agreement. It is advisable that parties

define the law governing the contract and the law governing the arbitration agreement

clearly to avoid disputes on these issues. Parties should also preempt from the nature of

the contract, if interim relief such as injunctive relief and measures for conservation or

protection of property, etc are required and provide for same.

After all the aforementioned deliberations, the parties must necessarily deliberate upon

the 'seat' of arbitration. This is because the mandatory provisions of the lex arbitri (law of

the place of arbitration) govern the procedural aspects of the arbitration. The seat also

provides the legal structure, the courts and the judicial system that eventually control the

controversies over procedure.

Language of arbitraitom

Language of arbitration

Specifying the language that will be used up front may save a considerable amount in
translators' fees. If the language is not specified, the arbitrators get to choose. This
clause holds value when the parties involved do not speak a common language.